Repro Med Systems Inc (REPR)

[Rawnoc]

It's possible that some distributors are depleting their supply of the old tubing sets as they make large orders for the new High-flo ones from the FDA approval that the company is stockpiling a huge inventory for and training people for.

There's two main components of Freedom60 revenue:

(1) The devices themselves.
(2) The tubing sets.

Number one is the device itself. Each sale is a one-time larger sale then the customer buys the tubing sets to be used every month. These are most likely the variance.

Number 2, the tubing sets, are the most predictable component. Those are the highly profitable recurring revenue stream that is doing nothing but constantly growing, but of course the tubing sets sold to a patient in any one quarter will be smaller than the device itself despite them being ongoing for life for the patient. In total, the tubing sets make up the greatest portion of the Freedom60 revenue.

There's other less likely scenarios that could cause lumpiness that I could name such as customers ordering their tubing sets for multiple quarters at a time, but the most likely is that the tubing sets are the biggest and always growing but the device sales are more lumpy and were down sequentially this quarter. Keep in mind the sequential decline was pretty small.